Long Beach forms support team to keep Molina Health in town

July 16, 2017

The City Council last week approved the formation of a business support team aimed at keeping Molina Healthcare’s headquarters in town following the recent firings of two key executives.

Though officials said there is no “insider information” that suggests the company is contemplating leaving, the council agreed the city should offer resources and support for Molina executives during this transitional time.

“Molina Healthcare has been a wonderful partner to the city of Long Beach,” Councilman Dee Andrews said. “While we do not know what their next steps are, I want to attempt to have our city reach out to Molina and see what type of assistance we may provide.”

The suggestion came about two months after the firm’s board of directors made the unexpected decision to fire then-Chief Executive J. Mario Molina and then-Chief Financial Officer John Molina. The Molina brothers are the sons of the company’s founder, the late C. David Molina, and despite the loss of their day-to-day jobs, the brothers are still on the board of directors of Molina Healthcare.

At the time of the firings, Molina Healthcare Chairman Dale Wolf said in a conference call and in a written statement that board members desired a leadership change in order to upgrade the firm’s “disappointing financial performance.”

Councilwoman Lena Gonzalez called the sudden change in management a “hard pill to swallow” for many in the city. “It has been difficult,” she said.

Offering a bit of reassurance on Tuesday, Mayor Robert Garcia told the council he was “heartened” by a recent discussion with Molina’s interim CEO, Joseph White, regarding the company’s future.

“The city of Long Beach is completely committed to Molina Healthcare, and I have assurances that Molina Healthcare is completely committed to Long Beach,” he said.

Still, he later admitted that when talking about any corporation, one can “never say never.”

“We should never assume that any job — regardless of who holds it or where it is — is going to remain in the city,” he said. “What I feel comfortable with is Molina’s commitment to Long Beach. I am very confident that the partnership between Molina and Long Beach will continue strongly for many years ahead.”

Molina Healthcare, which specializes in health care plans for people receiving government assistance through programs like Medicare and Medi-Cal, is Long Beach’s only Fortune 500 company and one of the city’s largest local employers.

The firm has a highly visible presence in downtown, with its main offices at Molina Center, a pair of 14-story towers at 200 and 300 Ocean Boulevard. The company also occupies the former Press-Telegram and Meeker Baker buildings in the 600 block of Pine Avenue.

Earlier this year, the company announced it would be moving 400 employees from Long Beach to an 11-story office tower in San Pedro, expected to be a boon for the South Bay, but a tough loss for the city.

Though the item ultimately gained unanimous support from the council on Tuesday, it followed a tense discussion about whether assembling a support team was a wise use of resources.

Councilman Roberto Uranga said the proposal attempts to influence a decision that is ultimately out of Long Beach’s hands.

“They are a private business and, as a private entity, they can do pretty much what they want in regards to staying or leaving,” he said. “It’s not up to us to decide that.”

He also cautioned against setting a precedent for future businesses that wind up in a sticky spot.

“It starts a slippery slope where we have other kinds of businesses that want to have that same assistance we give to one entity,” he said. “If we give to one, we have to give to all.”

Councilman Al Austin had similar concerns, particularly because there was no imminent threat of losing the company.

“I’m not trying to turn my back in any way on the employees and the good people of Molina Healthcare,” he said. “I just want to make sure we are smart in how we direct our staff and our resources.”

Uranga and Austin supported a substitute motion that would have drafted a resolution in “strong support” of keeping Molina in town, but it would have stopped short of creating a support team to do so. That motion failed by a vote of 2-7.

Once assembled, the team may be composed of representatives from city departments, as well as county and state agencies, business leaders, economic development officials and Molina Healthcare executives, according to a staff report.

Outside of business, the Molina family is well known for its philanthropic activities in Long Beach. John Molina chairs the Aquarium of the Pacific’s governing board and J. Mario Molina is also a board member, among other involvements, and members of the family have given some $2 million to the support the aquarium’s Molina Animal Care Center, a veterinary facility, as well as another $5 million for an ongoing expansion project called Pacific Visions.